Priceline (PCLN) Stock Rockets on 4Q and Full Year Results

Shares of the Priceline Group Inc. (PCLN) were trading up +82.01 or +7.30 percent to $1,205.00 per share in Thursday's premarket, after announcing better than expected results for its fourth quarter and full year early this morning. Priceline Group Inc. stock closed at $1,122.99 per share, up +2.00 or +0.18 percent in Wednesday's regular trading session.

Norwalk, Connecticut based Priceline Group Inc., formerly known as Priceline.com LLC was founded in 1997 and is the largest travel agent in the United States.
The company provides online travel and other related services such as hotel bookings and car rentals through its six primary brands: Agoda.com, Booking.com, KAYAK, OpenTable, Priceline.com and Rentalcars.com. The Priceline Group Inc. has operations in over 200 countries worldwide, including Africa, the Asia-Pacific region, Europe, the Middle East and North and South America. The company named Darren Huston as Chief Executive Officer last year, succeeding its former CEO, Jeffery H. Boyd who continues as Chairman of the Board.

The Priceline Group reported the total dollar value of all travel services including fees and taxes purchased by customers in the fourth quarter came to $10.7 billion, a +17 percent increase over the same period one year ago, or +23 percent based on local currency rates. Fourth quarter gross profit was $1.7 billion, an increase of +26 percent over last year's fourth quarter.

International operations gross profit in the fourth quarter contributed $1.43 billion to gross profit, an increase of +24 percent versus last year, or +32 percent in local currencies. Net GAAP income for the quarter was $452 million, or $8.56 per diluted share. Non-GAAP income was $577 million or $10.85 per diluted share versus $378 million or $7.14 for the same period last year. Analysts on average were expecting the company to announce a profit of $10.05 on revenue of $1.8 billion.

CEO Darren Huston stated in the company's press release that, "The Group's brands are starting 2015 with strong momentum. We are investing in our brands to organically grow our core business for the long-term. We also continue to invest in OpenTable and our BookingSuite branded hotel marketing services. These investments have a more pronounced impact on profitability in our seasonally low first quarter, but are the right investments to plant seeds for future growth. Today we are also announcing that the Priceline Board has given us an additional authorization to repurchase up to $3 billion of our common stock. We believe that buying our stock is a wise investment of our capital and demonstrates our confidence in the long-term outlook for our business.

For the full 2014 year, the company had gross travel booking of $50.3 billion, an increase of +28 percent over 2013 or about +30 percent on a local currency basis. Gross profit for the year came to $7.6 billion, +33 percent higher than in 2013.

International sales contributed $6.64 billion to full year gross profits, an increase of +32 percent over last year, while GAAP net income for 2014 came to $2.4 billion, or $45.67 per diluted share versus $1.9 billion, or $36.11 per diluted share in 2013.

The Priceline Group has been expanding, buying up companies and forming partnerships to counter increasing competition. Yesterday, the company announced it would purchase Rocketmiles for approximately $20 million. The Priceline Group projected 2015 first quarter international bookings to increase +3 to +10 percent and total bookings to increase +2 to +9 percent from 2014's first quarter.

The Priceline Group stock is on the low end of its yearly range, having traded as high as $1,378.96 back in May of last year. With this morning's earnings results, the stock looks like it could continue gaining in the near and medium terms and possibly test its yearly highs in the long term.

Other News About PCLN

Priceline to Buy Rocketmiles for About $20 Million
The deal comes while Expedia waits for regulators to approve its purchase of Orbitz.

How Priceline wins in Expedia-Orbitz deal
Priceline could benefit significantly from the merger.

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Published on Feb 19, 2015
By Jay Hawk
Jay Hawk
Jay Hawk enjoyed a 12-year professional financial markets career incorporating extensive first hand futures and options experience obtained by trading in the stock, commodity and forex markets on U.S. exchanges. Since retiring as a full-time financial market professional, he has been actively trading stock, commodities, forex and options for his own account and managing funds for others, as well as writing financial market commentary and educational articles.

Copyrighted 2016. Content published with author's permission.

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